OICCI raises alarm over Rs124.6bn tax refund backlog

KARACHI: The Overseas Investors Chamber of Commerce & Industry (OICCI) has expressed serious concerns over the growing backlog of unresolved income and sales tax refund claims, which it says is causing significant financial strain on foreign investors in Pakistan.

In a letter to the chairperson of the Federal Board of Revenue (FBR), the OICCI highlighted that despite regular follow-ups, pending refunds for its member companies have reached an alarming Rs124.6 billion as of January 2025. This amount comprises Rs67.4 billion in income tax refunds and Rs57.2 billion in sales tax refunds.

The chamber added that prolonged delays in processing these claims are severely affecting the financial operations of its member companies, which are multinational corporations contributing significantly to the economy through investments, job creation and technology transfer.

“These unresolved refunds are not only impacting the operational liquidity of foreign investors but are also tarnishing Pakistan’s reputation as a business-friendly destination. This could discourage future investments,” the OICCI stated.

The OICCI urged the FBR to take immediate action to expedite the resolution of these claims, particularly by prioritising older pending refunds, including those dating back to 2011 and earlier. The chamber also recommended implementing a streamlined, time-bound process to address the backlog, which it said would enhance investor confidence and reinforce Pakistan’s image as a favourable destination for foreign direct investment.